NewsSeptember 26th, 2013
Yarmouth's hulking power plant faces an uncertain future | DownEast Magazine
Casco Bay Blight
Yarmouth's hulking power plant faces an uncertain future.
By Edgar Allen Beem
The view from Portland’s Eastern Promenade and from Cumberland and Falmouth Foreside is a soulful vista of Casco Bay, islands, sailboats, and, oh yes, the massive oil-fired electric power plant at Birch Point on Yarmouth’s Cousins Island. Wyman Station, with its towering 421-foot smokestack, has been a local landmark and eyesore since it was built in 1957, even more so since the big two-tone 620-megawatt number 4 generator was added in 1978.
Once a source of soot and ash, electricity, and tax dollars, Wyman Station is now an on-call facility â?¨that pollutes less, rarely runs, and produces diminishing tax revenues. And since owner NextEra Energy Resources, a division of Florida Power & Light (FPL), put Wyman on the market this spring, many people are wondering whether this artifact of the old oil economy has any future in the twenty-first- century energy market. The short answer is probably not.
“In evaluating the role of our assets in our portfolio,” NextEra spokesman Steven Stengel said in an email message, “we concluded that our Maine fossil assets no longer strategically make sense for the business.”
Put another way, NextEra Energy Resources, America’s largest owner-operator of wind and solar generating facilities, is getting out of the oil business and out of Maine.
Wyman Station has been relegated to the role of a “peaker,” a plant that only runs a few weeks a year when the New England electric grid experiences peak demand due to heat waves and cold snaps. ISO New England, the independent system operator of the regional electric grid, holds forward capacity auctions to determine future electric needs, qualify power plants, and set floor rates for electricity. Currently, NextEra is paid about $2 million a month to maintain the four generators at Wyman Station as backup through 2017. So NextEra has power purchase agreements that commit it to producing power or purchasing it elsewhere into 2017. NextEra declines to say how often Wyman actually runs or how much power it produced last year.
“The Wyman Station provides capacity to the New England electric grid and currently runs in a limited peaking mode,” Stengel writes. “Further details are considered sensitive competitive information.”
Since the electricity industry in Maine was deregulated in 1998 and Central Maine Power (CMP) was forced to divest itself of generating plants, selling them all to Florida Power & Light, the value of Wyman Station for tax purposes has declined markedly, from close to half of Yarmouth’s total valuation to less than 8 percent. Currently, NextEra pays about $2 million a year on an assessed value of $95 million, but Wyman’s value is expected to keep depreciating.
“The plant assessment has already decreased over the past fifteen years, so I would anticipate that trend continuing,” says Yarmouth town manager Nat Tupper.
Though Wyman’s value, says Tupper, is “certainly not going to go anyplace near zero,” whether it ends up being revalued at $50 million or $25 million is up in the air with the plant on the market. “This is a 120-acre industrial parcel with deepwater access and a licensed fuel-receiving terminal, direct connection to the transmission system, a long-standing, already-sited industrial use, and relatively quick access to the interstate highway system,” says Tupper. “In addition, there continues to be some economic value and potential to the facility in the energy production and capacity markets, as well as ancillary services to the energy grid.”
So what are the options for an over-the-hill, oil-fired power plant? A number of possibilities have been rumored. “Our hope is that someone buys it and runs it as a power plant,” says Bill Dunn, business agent for the International Brotherhood of Electrical Workers, which represents fifty of the employees who keep Wyman Station ready round the clock. IBEW workers report that prospective buyers have been touring the plant, but, Dunn says, “Even though we consider ourselves partners, we can’t get any information at all.”
Back when FPL purchased Wyman Station, the company announced it would convert the plant to natural gas. That never happened, but might someone buy Wyman and convert it to natural gas today?
“I don‘t think converting to gas is a good option,” says Richard Silkman, founding partner in Competitive Energy Services, former director of the Maine State Planning Office, and a former Yarmouth resident. “It’s too expensive, and you can put a gas project just about anywhere.” Conversion to gas would also require bringing a major gas pipeline to Cousins Island from as far away as Westbrook.
Other possibilities that Yarmouth officials have heard mentioned are a buffer plant for bringing offshore wind power to land and a terminus for an undersea cable to bring electricity from Maine to the Boston market, relieving the transmission bottleneck through New Hampshire.
But Rich Silkman points out that most offshore wind projects are proposed for midcoast Maine, too far away to make Yarmouth a practical landing. And an undersea cable from the decommissioned Maine Yankee site in Wiscasset to Boston, the so-called Green Line Project, was proposed back in 2007 and so far has gone nowhere.
“It’s hard to imagine a world in which [Wyman Station] has long-term viability,” says Silkman, whose company helps business and industry manage energy costs. “It will run this winter, but even when it runs this winter, it is only designed to cover costs, not make money.”
But NextEra spokesman Steven Stengel insists, “We believe we will be successful in finding a buyer for our Maine fossil assets.”
FPL paid $845 million for all of CMP’s generating assets back in 1998 when CMP’s stock market value was $509 million. FPL immediately sued to get out of the deal when it realized that the Federal Energy Regulatory Commission was changing transmission rules so they no longer favored existing power producers quite as much. The lawsuit was thrown out of court after only two hours. So selling Wyman is not just a matter of getting out of the oil business, it’s also about NextEra cutting its losses.
“They probably overpaid by $300 million for that facility,” says Silkman.
As soon as Yarmouth town officials heard that Wyman Station was up for sale, the town manager and the town’s attorney flew down to Juno, Florida, to ask that NextEra partner with the town in planning an exit strategy and the future of the town’s largest taxpayer. They got a chilly reception.
“I’m fine with them as a corporation making a decision to divest,” says Yarmouth Town Council chair Steve Woods, “but I’m not fine with them doing it in a way that is callous toward a community and state that has been a welcome home to Wyman Station.”
Woods, a marketing executive and candidate for governor in 2014, scoffs at the NextEra website promise to “maintain an ongoing relationship with the community long after our projects are completed,” saying, “Their refusal to engage in reasonable discussions about the future is an insult to Yarmouth.”
Woods says his major concern is that NextEra might sell Wyman Station for next to nothing to a small limited-liability company, thus transferring liability for potential site remediation from a $15 billion corporation to an LLC with few resources.
In 2001, the Maine Department of Environmental Protection (DEP) required Wyman Station to install pollution controls designed to reduce the plant’s emissions of nitrogen oxide by 800 to 1,200 tons a year, an action hailed by the Natural Resources Council of Maine (NRCM) as “Maine’s biggest air pollution victory in thirty years.”
The combination of installing scrubbers and running far less frequently has reduced the air pollution from Wyman Station, but earlier this year the DEP fined NextEra $25,800 for exceeding its nitrogen oxide emissions limits on seventeen occasions between February and July 2012.
Should Wyman Station ultimately be decommissioned, demolished, and re-developed, Yarmouth officials want to know what the environmental cleanup might involve. NextEra has solidified the fly ash in a 2.6-acre lagoon by mixing it with a slurry of concrete, but it is unknown whether there might be environmental hazards, such as PCBs, mercury, and asbestos, to deal with.
“It’s a dinosaur,” says Beth Nagusky, Maine director for Environment Northeast. “What we are envisioning is a twenty-first-century electrical grid with less reliance on large central station power plants that are polluting and dependent on fossil fuel.”
Nagusky, former staff attorney at NRCM and former acting director of the Maine DEP, worked with NRCM and other groups to pass Maine’s sweeping new energy bill, which mandates that non-transmission alternatives such as energy efficiency, pricing incentives, and local sources of power be explored before any more transmission power lines are built. Promoting alternatives, Nagusky says, will mean “we no longer need [Wyman Station].”
A sea change in the energy market over the past twenty-five years is also rendering Wyman obsolete. In 1990, the leading sources of in-state electricity generation in Maine were nuclear power, hydropower, and oil. Today, nuclear power is gone and oil is on its way out. “In 2012, the region’s natural-gas-fired generators produced 52 percent of the electricity generated in New England,” says ISO New England spokesperson Marcia Blomberg. “By comparison, the oil-fired generators in New England, in aggregate, produced less than 1 percent, and the coal-fired generators produced less than 3 percent.”
New England’s heavy reliance on natural gas is problematic. Natural gas is a cleaner-burning fuel than oil or coal, but it is a fossil fuel, and it is not a renewable energy source.
The more immediate concern, however, is that New England tends to run short of natural gas in the winter, when it is used not only to generate electricity but also to heat homes. For that reason, ISO New England has directed the region’s oil-fired generating plants to increase the storage of oil this winter. Wyman Station, in other words, is not dead yet. Until Maine and New England construct an adequate system of natural gas pipelines, there will still be a need for oil backup.
But Dylan Voorhees, clean energy director of NRCM, argues that NextEra’s getting out of oil and into wind sends a clear and hopeful message about our energy future, even if it does not include Wyman Station in the long term. “The big picture, positive story,” say Voorhees, “is that we don’t need to produce power with oil anymore. We can move to renewable resources rapidly.”
That’s good news to David and Pamela Adams. The Adamses moved to Cousins Island in 1978, the same year Wyman Station’s huge new number 4 generator began raining soot down on the island and the bay. David Adams, a cardiologist, was one of the residents who led the successful effort in the 1990s to get the Maine DEP to reduce the amount of nitrogen oxide emissions Wyman was allowed to release.
“My biggest dream,” says Pam Adams, “is that the power plant will turn into a marina owned by the Town of Yarmouth.”
“Pam and I have private hopes,” adds David Adams, “that somebody with a lot of bucks and not much judgment will convert it into a marina, perhaps with condominiums, maybe something bonded by the Land for Maine’s Future.”
Converting the Wyman Station property to a use more in keeping with the modest residential nature of Cousins Island and the littoral beauty of Casco Bay would please a lot of local people, even if it meant fewer tax dollars for Yarmouth. For the time being, however, the oily peaker with its great cement smokestack and double row of high-tension towers marching down to the sea remains operational — and on the market.
Edgar Allen Beem is a freelance writer from Yarmouth who has been contributing to Down East since 1983.